Just a month after the airport entered into a scheme implementation deed with the Sydney Aviation Alliance (SAA) at $8.75 a share, the Australian Competition and Consumer Commission (ACCC) said it will not oppose the takeover.
ACCC chair Rod Sims said its investigation found “very little, if any” competition between local airports.
“This is no surprise, as we’ve been saying for a long time that Australian airports such as Sydney Airport are natural monopolies, with significant market power and no price regulation.”
“The proposed acquisition is therefore unlikely to substantially lessen competition in a market that already has such little competition.”
The bid prices Sydney Airport at some $23.6 billion and represents an uplift in equity value of $1.3 billion to the price of $8.25 initially offered by the consortium in July 2021.
The ACCC revealed during its review process that some interested stakeholders flagged concerns that the acquisition could “add to the flow of information between airports with common ownership” effectively giving airports bargaining power against airlines, however the watchdog dismissed the concerns.
“We understand the stakeholder concerns, however, fundamentally the lack of competition between airports means that any such sharing of information between airports would not amount to a substantial lessening of competition, which is what the law requires before we can oppose a merger,” Mr Sims said.
The scheme meetings between Sydney Airport and SAA are expected to be held in the first quarter of 2022.
Neil Griffiths
Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.
Neil is also the host of the ifa show podcast.
